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So when I bought the house back in 2001, I got a fairly good loan rate at the time of 6.875%. However, since I needed to do some work on the house right off the back, I got a 100% loan. The way the credit union did this was one primary loan at the 6.875% rate worth 97% of the total price, and a second mortgage for 3% of the loan at a much larger 11.125% rate for 20 years. I've paid a bit extra against the higher interest loan to pay it off faster and to help get rid of PMI.

Well, interest rates have fallen, and I've been sitting on the fence on this. Jen and I have gotten married, but her name isn't on the title or the loan. Houses smaller than this one have been sold for a great deal amount of money than I paid for this house. Now, interest rates are inching up, so ... I called the credit union to ask about refinancing. Assuming that the house appraised for a value that I think it will or higher, we can lock in a 20 year loan at 6.25% for the remaining balance of the principle without increasing our monthly cost. And all this with the closing costs of the re-fi added to the mortgage. In the long run, we'll save almost $90,000 in interest if we re-finance and not increase our monthly payments. Oh, and Jen would be on the title and loan.



( 2 comments — Leave a comment )
Sep. 6th, 2003 10:19 am (UTC)
Even without the re-fi, I take it you haven't built enough equity to get rid of the evil PMI?

Isn't it amazing to think of "saving" $90K? Real estate is ridiculously expensive.
Sep. 6th, 2003 02:15 pm (UTC)
Yes, if I were to have the house assessed independant of the re-fi, I'd be able to drop PMI at this point.

I actually have been playing with the actuarial tables for my loan, and realized that I will pay almost the same amount in interest for the house as the prinicple after re-financing. It was a great deal more pre-re-fi. Cwrazy stuff here man...
( 2 comments — Leave a comment )